from washington, the "the mclaughlin group," the american original. for over three decades, the sharpest minds, best sources, hardest talk. >> "the mclaughlin group" is brought to you by siemens. factories. and we're building to last. siemens. answers. issue one. sequester showdown. >> so these cuts are not smart, they are not fair. they will hurt our economy. they will add hundreds of thousands of americans to the unemployment rolls. this is not an abstraction. people will lose their jobs. the unemployment rate might

tick up again. >> president obama used his bully pulpit this week to call on congress to avoid, get this, sequestration. that's washington nomenclature for automatic spending cuts due to go into effect on march 1, next friday. on that date, both military and domestic programs will feel the impact of the monumental $85 billion cuts slated for this year, 2013, alone. not only does the president condemn the cuts, but his administration is also sounding the alarm. first, the secretary of state. >> but in these days of the looming budget sequester that everyone actually wants to avoid, or most, we can't be strong in the world unless we are strong at home. my credibility as a diplomat, working to help other countries

create order is strongest when america at least puts its own fiscal house in order, and that has to be now. >> next, the secretary of defense. >> members of congress need to understand that they were elected to protect the public, not to hurt the public. and i hope they will remember that as they hopefully work towards a resolution of this issue. >> the president and his cabinet all want, quote unquote, smarter cuts, and with them, the closing of key tax loopholes on the wealthy, including corporations. he accused republicans of obstinacy and avarice on taxes. >> are you willing to have teachers laid off or kids not have access to head start? or deeper cuts in student loan programs? just because you want to

protect a special tax interest of americans don't benefit from. >> let me read a definition of sequestration. you ready? a government revenue shortfall met by withdrawing money from already funded programs. any problem with that definition? >> no, that's right on the money. >> is it clear? i'll read it again. a government revenue shortfall met by withdrawing money from already funded programs. now, question. will the impact of sequestration truly be horrifying, or is the talk of fiscal armageddon political hyperbole? mort zuckerman. >> when it was originally passed these automatic spending cuts were going to affect so many pieces of legislation that everybody thought they would be forced into it, it would be like a suicide pact, how could they let this happen? nobody should have

underestimated the dysfunction al tee of this congress and the president to work together. so they do not have an agreement and now they're going back to the same old rhetoric and we're making no progress. it's dais grace. >> eleanor, can you improve on that? >> it's sort of a slow squeeze that comes down in pieces because they have to take $85 billion out of existing government accounts that would otherwise have been spent between now and the end of the fiscal year, which is in october. so it's a lot of money in a short amount of time, and it will affect pentagon workers, and they've made a point, they're going to have to be furloughed a day a week beginning inapril. you are going to probably have individual stories of hurt and pain, the family that saved up for a vacation and shows up at a national park, two kids in the backseat, and it's closed. that's what happened during the government shutdown. it's stories like that that can go viral. you are going to have kids turned away from headstart because they can't afford to cover that many people. but it's not all going to be felt in one day.

and frankly, people are so cynical about government and government spending that most people think, you know, either the politicians are going to solve this at the last minute, or it is not going to matter anyway. so you haven't -- the president has tried to gin up an emotional reaction in the country among his supporters, and i don't think that's really happened. >> to add to that, only 44 billion of the 85 billion in cuts will go into effect in 2013, amounting to about 0.6% of gdp, according to the congressional budget office. >> it's a tiny fraction of all federal spending. that's what we need to get at. this is really not a big cut. if we can't make that amount of cuts to our budget, we're really doomed. if you do look at the polls, people want to reduce our budget. they know the spending is out ofly crew. every time congress tries to take a stab at it, they fail. so they've come to this point. i think one of the reasons why people aren't getting all

excited about it this time is because both sides know that this 8% cut, across the board cut in federal spending, does not have to result in long lines at the airport or furlough of essential employees. it is going to be the choice of the administration, how much pain they want to inflict on the public in order to put pressure on the republicans to agree to their solution, which is raising taxes. >> what do you think? is sequestration going to be harmful? >> it's not going to be the armageddon, but if it goes on for several months, if one party is saying it's no big deal, the republicans, and then another party is saying it's a terrible thing, the democrats, i'd rather be the democrats, because the american people will see them, they will react. they don't like the idea of chaos at the federal level. they don't like the idea of long lines in airports, and whether it's ginned up by the agencies and doesn't have to happen or not, it will happen, believe me, and it is going to be very, very bad for anyone who pre dendz it's not a big deal. >> enough donkeys.

now the elephants. >> john boehner shot back. quote, the president got his higher tax. $600 billion from higher earners with no spending cuts at the end of 2012. he also got higher taxes via obamacare. the president's sequester is the wrong way to reduce the deficit, but it is here to stay until washington democrats get serious about cutting spending. the government simply cannot keep delaying the inevitable and spending money it doesn't have. unquote. question, president obama wants to pin sequestration on the republicans. speaker boehner calls sequestration, as you saw, quote unquote, the president's sequester. is he right? >> yes, he is right, in that it was proposed by the president and by his folks when they had the budget impasse, as a way of i say, putting pressure on both sides at some point to deal with it. but our government is so dysfunctional we are at this

particular stage now. the problem now is, where do we go from here in terms of this is going to undermine the confidence of the country in the government, and its ability to address problems. it is going to undermine the confidence of business who wants to invest. this is just another disgrace in terms of the way the american government works. >> it's an exaggeration. >> no, i don't think it is. i think it is a major issue. this money will be cut one way or the other out of the budget but it is going to tell everybody something about our inability to deal with a most obvious problem. >> how should it be cut? >> i think to some extent across the board but i do think it was in fairness, okay, an increase in taxes, you are going to have to have another increase in taxes, but they really need to cut expenditures. they're not dealing with the biggest, healthcare. it was left out. >> why, because that is -- that is obama's sacred cow? >> well, he's got a few sacred cows, but that's one of them. >> eleanor. >> first of all 178 republicans

voted for sequester. john boehner said he was very happy. he got 91% of what he wanted. the impasse here is that the republicans don't want to give anything in new revenue, and the public is with the president, that you can't have a deal which only relies on spending cuts when you have an economy where the recovery is fragile. it's the last thing we should be doing. and in terms of healthcare, "time" magazine has a terrific cover this week about medical bills, and, you know, the president doesn't have control over all of those things, and the big hero in the "time" magazine cover story is medicare, which is actually doing a very good job in controlling healthcare spendingyet more sequester grief. >> the u.s. travel association and congressional staff aids concur that with the budget sequester, one hour will be added to security wait at the nation's biggest and busiest airports. and after clearing the security lines, they will probably wait even longer because of cuts in federal aviation staff, meaning

a cut-back in air traffic controllers. connecting passengers, beware. >> question. this is four, susan. concentrate on it. what makes this travel torment unlikely to come to pass? >> first of all, it's -- it doesn't have to come to pass. the tsa can cut money where it wants. it's a question of whether, as i said before, the president wants to use this to pressure the republicans by putting as much pain as possible on the public, therefore the public gets upset, but that's only going to work for so long for the public is going to figure out this is a political tactic and it could really back fair on the administration. i think they're keenly aware of that, and that's part of the reason why they might be a little hesitant to start making people miss flights, stand in already long and torturous tsa lines. it's worked in the past and it accomplishes their goal, and that is the ending, they do not want to cut spending.

eleanor, you're wrong. they have already given up on taxes in the last fight. >> nobody cut last time. when are we going to cut? can anybody answer that question? >> it's not a budget deal. $1.5 billion. >> a slight reduction in the rate of growth. just like this. every law maker on capitol hill -- >> old on. >> both parties will tell you -- >> let paul in. >> so for the rord, we shouldn't have sequester at all. we should not be cutting nondefense discretionary spending. cutting short-term spending does nothing for the big problem which is long-term spending. we need that money for the services, we need that money to be in the economy. this is completely ridiculous. we should get rid of obama care ?roo. what do you want to do with our $17 trillion national debt? >> i want to control healthcare costs. if we get healthcare costs under control over the long term we have no fiscal problems. republicans want to be well advised to join barack obama and after conversation about healthcare costs.

>> why is this so stubborn a problem, healthcare costs? why is it so stubborn? why can't it be affected? >> because ideology is involved. >> people don't take responsibility for their own health. >> my turn now. what you need to do is close loopholes like carried interest, which mort supports and which would get money from the upper end. you need to close some of those loopholes, then cut entitlement programs, which the president has put some of those things on the table, but he is not going to do if the he doesn't get anything on the table. it's the republican refusal. >> excuse me, i not only do not support carried interest, i've never supported carried interest. >> you want to close that loophole. >> yes, i do. >> that's what i meant. >> what does the ama say about this, the american medical association, which is the association representing doctors? >> the ama is actually kind of enlightened about a lot of this stuff. >> you mean they're in favor of

the obama programs? >> they certainly supported obamacare. >> but they're just a fraction of the doctors out there. a lot of dock out there don't -- >> obamacare is helpful to them. we're talking money here. >> the obamacare is helpful in controlling healthcare costs. a huge chunk of the deficit reduction that's been achieved is through obamacare. >> when we come back, minimum wage hike.

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minimum wage hike. >> today a full-time worker making the minimum wage earns $14,500 a year. even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. tonight, let's declare that in the wealthiest nation on earth no one who works full-time should have to live in poverty and raise the federal minimum wage to $9 an hour. >> minimum wage hike. one proposal put forward by the president at last week's state of the union address. the current federal minimum wage is $7.25 an hour. a rate the president wants boosted by 24%, to $9 an hour. a $1.75 boost. if passed into law, the $1.75

hike would be implemented in stages to reach $9 an hour by the end of 2015, two years from now. thereafter, the president wants the minimum wage index to keep up with inflation. the white house says a hike would help lift the prospects of 15 million low-income workers. >> it could mean the difference between groceries or the food bank, rent or eviction, scraping by or finally getting ahead. for businesses across the country, it would mean customers with more money in their pockets. >> despite this promise of a higher customer purchasing level for business in general, many small businesses are worried at the prospect of raising what they now pay their workers. >> i have actually a couple of choices. the two choices are to close down. the other choice is to increase prices. >> republicans in congress, including house speaker john boehner, are also tepid.

>> would you raise the price, guess what happens. you get less of it. american people are still asking, where are the jobs. why would we want to make it harder on small employers to hyer people? >> question is speaker boehner right to worry that a thing wage would depress hiring? >> substantial literature on the minimum wage, there have been natural experiments where one state has raised it and the other hasn't, and for the most part, not totally, but for the most part the literature says that a modest hike does not lead to a loss of jobs. >> what about in a depressed labor market? >> well, i don't know that there's been any studies on raising the minimum wage in a labor market like we have today. ours is kind of unique. but, look, if you're a small businessman and you built your business around the minimum wage, and you're a pizza parlor, the pizza parlor next-

door has built its business on paying slightly higher wages, and your workers are used to being paid more, less turnover, better skilled, then the business that has the low wage, they're going to good out of business, and the business with the high wage is going to take over. so it's going to be a net. >> productivity is better if you pay people a little more, and 17 states already have a higher minimum wage than $9. and if the minimum wage had kept up with inflation, it would be well over $10. so this has been a democratic issue for lang time. senator ted kennedy championed it. they may not get it this congress, but it's on its way. >> this is conundrum time. say you can pay $18 an hour for two employees. got that? $18 an hour for two employees. if you can hire a new worker for $7.25 you can then afford to pay a experienced worker $10.75 but if the new hire costs you 9 $9 you will keep that employee and your more

experienced one at $1 to control your unit labor costs what. ask that tell you, mort? >> it tells you there are going to be different strokes for different folks. there are going to be a lot of companies, frankly that will frankly hire fewer people because they feel they can't afford it. one of the things that is interesting in this job recovery such as it is, 68% of the jobs are part-time low-wage jobs. we're becoming a low-wage, part- time employment center, and that's very bad for the united states. this will change its slightly, but it may make it worse. people will just hire fewer people in this very difficult time. if you were in a more prosperous time i would have thought this would be a better time to introduce it. >> how should boehner handle this? go along or fight it? >> the idea behind minimum wage is tone courage people to look for jobs that are paying more that are outside the minimum wage spectrum. this as mort was saying encourages us to become more of a low-wage society, more dependent on government.

it's bad for the strength of the united states overall. i think that john boehner, a former small business opener, really beefs that, and i don't think -- now, congress raised minimum wage five years ago. i don't think you are going to see it happen this year. >> i think it's a good idea, but i think it's steep. issue three, attacks on both houses. >> quote, the theory is civil war is becoming increasingly sec tear i don't know and the behavior of both sides is growing more and more radicalized, so says a new report investigating syria's two-year-old conflicts which has left an estimated cites, qu unquote, credible evidence of war crimes and crimes against humanity perpetrated by the government forces of bashar al- assad. and the opposition rebels who oppose them. the report details, quote,

sexual violence, abuses against children, unquote. one of the authors of the report, a former chief u.n. war crimes prosecutor says syria should be refused to the icc, the international criminal court. those responsible for such crimes, he says there is a list of the high-level perpetrators, should be prosecuted. >> i would say as a defender of justice, it must be imminent, urgently, because crimes continuing committed in syria and the number of incidents are increasing day to day, so justice must be done. >> the u.n. panel also had this recommendation to the international community. quote, curb the proliferation and supply of weapons, unquote, into syria. >> question, one round robin.

the timing of the report helpful or unhelpful to diplomats trying to bring an end to the fighting in syria? mort. >> i think it's helpful. it will inspire some other country to get involved that in war. >> eleanor night. love the u.n. but i think it's largely irrelevant. the next step is really up to our new secretary of state, john kerry, and whether he can draw on his long relationship with assad to try to get him to exile. >> good point. >> i agree completely with eleanor. it hinges on assad getting out of there. nothing is going to change until that happens. >> i think the security council has to vote on this. if they think it's unhelpful, they will vote no, so it will have no effect. >> kerry was saying he talked to assad earlier and he thinks assad can be persuaded to leave. >> maybe this will be a gas to get him to move quicker. >> any thoughts on that? any inside information? >> no, but, you know, the twoaps syria are flowing through iraq, which is another complicating factor.

>> from iran mostly. >> we have something to do with iraq, and it's another area where john kerry may be able to apply some influence. >> he's good. >> i hope. so. >> he's good at what he does, and he's traveled. >> he knows the players, he flows thish. >> how many years was he chairman of the committee? >> 25? >> he wasn't chairman all 25. >> but he was on the committee. >> he was on the committee. >> we'll be right back with predictions.

predictions. mort. >> given the weakness of the economy the federal reserve will not tighten interest rates for at least another six months. >> eleanor. >> the oscar nominated documentary, invisible warl continue to reform rules about sexual assault in the military. >> susan. >> manner 1st the sequester will happen. >> paul. >> lincoln beats out argue pict predict that daniel day-lewis will receive the oscar for best actor and will be reveered worldwide as the best actor in the world. bye-bye!